BANKING OMBUDSMAN

Banking Ombudsman is a quasi-judicial authority created in 2006, and the authority was
created pursuant to a decision made by the Government of India to enable resolution of
complaints of customers of banks relating to certain services rendered by the banks. The
Banking Ombudsman Scheme was first introduced in India in 1995 and was revised in 2002. The
current scheme became operative from 1 January 2006, and replaced and superseded the
banking Ombudsman Scheme 2002. Presently the Banking Ombudsman Scheme 2006 (As
amended up to July 1, 2017) is in operation.[1]
From 2002 until 2006, around 36,000 complaints have been dealt by the Banking Ombudsmen.
There are 22 regional offices of Banking Ombudsmen in India. The latest offices are opened in
Jammu, Raipur, Mumbai-II & New Delhi-III.
The type and scope of the complaints which may be considered by a Banking Ombudsman is
very comprehensive, and it has been empowered to receive and consider complaints pertaining
to the following;

 Non-payment or inordinate delay in the payment or collection of cheques, drafts,

bills, etc.;
 Non-acceptance, without sufficient cause, of small denomination notes tendered for
any purpose, and for charging of commission for this service;
 Non-acceptance, without sufficient cause, of coins tendered and for charging of
commission for this service;
 Non-payment or delay in payment of inward remittances ;
 Failure to issue or delay in issue, of drafts, pay orders or bankers’ cheques;
 Non-adherence to prescribed working hours;
 Failure to honour guarantee or letter of credit commitments;
 Failure to provide or delay in providing a banking facility (other than loans and
advances) promised in writing by a bank or its direct selling agents;
 Delays, non-credit of proceeds to parties' accounts, non-payment of deposit or non-
observance of the Reserve Bank directives, if any, applicable to rate of interest on
deposits in any savings, current or other account maintained with a bank ;
 Delays in receipt of export proceeds, handling of export bills, collection of bills etc.,
for exporters provided the said complaints pertain to the bank's operations in India;
 Refusal to open deposit accounts without any valid reason for refusal;
 Levying of charges without adequate prior notice to the customer;
 Non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank
on ATM/debit card operations or credit card operations;
 Non-disbursement or delay in disbursement of pension to the extent the grievance
can be attributed to the action on the part of the bank concerned, (but not with regard
to its employees);
 Refusal to accept or delay in accepting payment towards taxes, as required by
Reserve Bank/Government;
 Refusal to issue or delay in issuing, or failure to service or delay in servicing or
redemption of Government securities;
 Forced closure of deposit accounts without due notice or without sufficient reason;
 Closure of account without customer concern.
 Refusal to close or delay in closing the accounts;
 Non-adherence to the fair practices code as adopted by the bank; and
 Financial loss incurred to customer due to wrong information given by bank official.
 Any other matter relating to the violation of the directives issued by the Reserve Bank
in relation to banking or other services.
 complaints from Non-Resident Indians having accounts in India in relation to their
remittances from abroad, deposits and other bank-related matters;[2]
The Banking Ombudsman is a relatively new term. To ensure you gain a better understanding of
what it means and its roles and responsibilities, in this article, we will explain in detail what a
Banking Ombudsman is and how it came into existence. We will also consider the purpose it was
created for and the powers that it has been granted.

What is a Banking Ombudsman?

The Banking Ombudsman is a position created by the Government of India to address the issues
and complaints of the customers. A senior, experienced official appointed by the Central Bank of
India, that is, the Reserve Bank of India, to offer redress and offer amends, if possible, to the
consumer complaints regarding the shortcomings in the banking sector.

In simple words, Banking Ombudsman is a designation, a position created by the Government of

India that works as an RBI complaint number where the customers who are dissatisfied with the
services received can lodge their complaints.

The formation of a Banking

Ombudsman
The RBI Ombudsman was created in the year 2006 by the Government of India. However, the
Banking Ombudsman scheme was introduced in India way back in the year 1995. The scheme
that is now in power was enacted in 2006, replacing the Banking Ombudsman scheme that came
into being in the year 2002.

The 2006 RBI Ombudsman scheme has been amended till July 2017.

Who can act as a Banking

Ombudsman?
The appointments of a Banking Ombudsman are subject to certain conditions such as:

1. The person should be of high standing in the Legal, Banking, Financial Services, and/or
Public Administration to be appointed to this post.

2. A Banking Ombudsman is appointed for three years. In case an extension of tenure is

granted, the extension cannot exceed more than two years. This extension is subject to
the upper age limit of 65.
Where are they appointed?
Since a Banking Ombudsman redresses complaints regarding the deficiencies in the banking
sector, it makes sense that they are appointed at all places where the RBI has branches.
Therefore, Banking Ombudsman is appointed in all places where the Reserve Bank of India
happens to have offices.

The RBI has thus appointed Banking

Ombudsman at the following places:
1. New Delhi, the national capital of India

2. Mumbai, the financial capital of India

3. Patna, the capital of the state of Bihar

4. Guwahati

5. Chandigarh

6. Jaipur

7. Ahmedabad

8. Bengaluru

9. Bhopal

10. Bhubaneswar

11. Chennai

12. Hyderabad

13. Kanpur

14. Thiruvananthapuram

People of these cities can easily avail the services of a Banking Ombudsman who is appointed
as an RBI complaint number.

The roles and responsibilities of the

Banking Ombudsman
The Banking Ombudsman is a significant position and is a step in the right direction toward
consumer complaints and redressal. The powers and duties of a Banking Ombudsman are vast
and comprehensive. It performs several tasks and has control over a number of things which
include:

 A Banking Ombudsman is responsible for matters relating to non-payment or delay in

collection of cheques, bills, drafts, etc.

 He/she is also responsible for matters concerning the non-acceptance of small

denomination notes or coins without sufficient cause or justified reason. He is also
responsible for registering complaints and ensuring action if someone is charging fees for
such services.

 Failure to issue or delay in issues of banker’s cheques, non-adherence to working hours;

failure of banks in providing a banking facility promised by giving in writing; failing to
honour guarantee or letter of credit commitments all fall under the ambit of the
responsibilities of a Banking Ombudsman.

 Matters relating to non-acceptance of payments towards taxes as prescribed by the RBI

or the Government of India or forced closure of deposit accounts without prior notice and
without sufficient justified reasons fall under the responsibilities of a Banking
Ombudsman.

 A Banking Ombudsman receives complaints regarding non-adherence to any of the

banking guidelines laid down by the RBI. It also looks after matters concerning
maintenance of banking records and transactions, as well as maintenance of their
accounts by OCI cardholders and NRIs.

The scope of work and the responsibilities of a Banking Ombudsman are far-ranging and wide. A
Banking Ombudsman ensures smooth functioning of the Banking Sector by ensuring that the
consumer complaints are taken care of. It’s working as an RBI complaint number is very crucial
for consumer satisfaction.

The procedure for redressal

Any person who feels wronged by a bank can approach an Ombudsman with his or her
complaint either in person or through a chosen legitimate representative. A complaint can be
lodged by giving a letter in writing to the duly chosen and appointed Ombudsman of that
jurisdiction.

However, it is important to keep in mind that since the Ombudsman has not been constituted
under a statute, it enjoys no legal authority to compel any person or party to obey his orders or
adhere to its decision.

The banks are bound to comply with all the provisions of the Ombudsman Scheme, but the
members of the public cannot be forced to comply with the orders of the Ombudsman.
Conclusion

Now that you have a thorough understanding of the creation and working of the role of an
Ombudsman, we are sure you will find it easy to reach out to the Ombudsman yourself in case of
some complaints.